If there’s one major culprit that kills innovation within corporations, it’s bureaucracy, and, unfortunately, most of today’s large corporations are bloated with bureaucracy - reams of red tape and “processes” that often bring creative breakthroughs to a screeching halt.

Take for example General Motors Co., famous for its government bailout and bankruptcy restructuring in 2008. Known for its layers of reporting relationships, strict production processes, and management barricades, GM was faced with completely overhauling its structure - and its corporate mindset.

GM’s Chairman and Chief Executive Dan Akerson told the Wall Street Journal in June 2011 that pumping out the most number of cars is no longer the main objective. Getting the right people moving beyond “sub-objectives, and seeing the big picture” is the challenge, he said.

In other words, removing obstacles that prevent innovative product design, design that fits more with what customers want and desire. For example, during the last decade, management continued to let a group of GM engineers work on an ill-fated new Hummer sport-utility vehicle, even though the engineers eventually realized that the Hummers would never go into production.

To shakeup GM’s counter-innovation culture, early in 2011, Akerson appointed a new head of vehicle development, 49-year-old Mary Barra.

The WSJ reported that Barra’s frustration with bureaucracy came early. During a meeting with a young engineer, she learned that customers were unhappy with the keyboard in their cars’ navigation systems, as the keyboards were arranged alphabetically rather than in the traditional “qwerty” format. The engineer tried for several months to get a response from GM’s upper management on making a keyboard change, but still hadn’t received a response. Barra told the WSJ that “sometimes we spend too much time arguing with ourselves. The biggest waste here is when we have a bunch of engineers waiting on us to make a decision, and not being able to do anything.”

The Ultimate Innovator

How do companies like GM turn themselves around, streamlining and becoming more innovative? Changing a corporate culture and mindset isn’t easy, but innovation experts often look to highly innovative companies for clues.

How Managers Unknowingly Drain Meaning from a Job*

In a study of knowledge workers and what motivates them to perform at peak creative levels, Teresa M. Amabile and Steven J. Kramer, looked at what motivates workers – and what de-motivates or drains workers.

Amabile, the Edsel Bryant Ford Professor of Business Administration at the Harvard Business School, and a creativity researcher, and Kramer, an independent researcher and author, have been studying creativity and its link to meaningful work for over 15 years. Continue reading here...

Apple Computer, Inc. is one such example. How does Apple repeatedly produce products that customers line up to buy 24-hours before their official release dates, even during the worst recessions and economic downturns?

Business creativity experts point to the philosophy of its founder, Steve Jobs. Often called the penultimate marketer, Jobs is much more than that, according to Mark W. Johnson, Chairman and Co-Founder of innovation consulting firm Innosight.

In Johnson’s Bloomberg Businessweek article, “Making Innovation Matter,” he writes that from the company’s beginning, Jobs was obsessed with the user’s “experience.” Apple came up with the first graphical user interface because the company had the consumer in mind from the start, trying to make working with the computer as seamless as possible.

The company still adheres to finding the most positive user experiences for its customers for all its products - iPods, iPads, iPhones, and iTunes – keeping the interface for each product as similar as possible. Product design underscores every business decision at Apple.

Johnson writes that the obsession with design at Apple is evident in the company’s communication patterns, as designers at Apple “report directly to Jobs.”

Creativity and Innovation at Kraft Foods

Employing 3300 scientists, chemists, and engineers in 15 major research and development locations worldwide, Kraft Foods Inc. knows the importance of creating a culture of creativity and innovation. These employees design and develop the products that keep the company profitable and growing. The success of the company depends on their ability to create novel products that consumers want and need – even before consumers are aware of that need.

Much has been written about the success of Apple, and Jobs’ “innovation” philosophies that are now imprinted throughout the corporation. Jobs understood something about consumers that few others in the technology industry – or most other industries – knew. Jobs understood that emotions play a large part in consumer purchases. He knew that very often, people use their purchases to define themselves, to tell a story about who they are, what they like, and how they want to be viewed by others.

And, as the company grew, he understood the importance of managing innovation despite the bureaucracy, keeping creativity at the forefront of all business decisions. He also understood that creativity requires risk taking, and that some failures are inevitable.

However, when Jobs left the company for 10 years from 1987 to 1997, the company faltered dramatically, so that by 1997 when Jobs returned to Apple, shares cost $3.42 and the company’s market cap was at about $3 billion. As of 2010, the price of a share of Apple stock had skyrocketed to $266, and its market cap equaled $241 billion.

When Jobs was asked during a 2004 interview with Bloomberg Businessweek why Apple struggled to innovate during the decade he was gone from the company, he pointed to a philosophy shift in leadership. As in other companies that go through similar upheavals, the leadership changed from “product” focused people to sales people, or those who become more intent, exclusively, on increasing units sold versus the quality of those units. This happens in many companies that start out with great products, he said.

Profit is important, Jobs said, but the reason to keep making money is so that the company can keep making great products. And designing the best, highest quality products that provide an outstanding customer experience is Jobs’ mantra.

During the economic rough spots of the 1990s and early 2000s, many other companies, such as General Electric Co., Procter & Gamble Co., and 3M, focused almost exclusively on pumping out products on efficient assembly lines, and at the lowest possible costs. Rigorous statistical measurements were developed to aid companies, helping them analyze and identify better production and distribution opportunities.

Innovation at these companies started to become as regimented and analyzed as assembly line processes. Strict procedures for inventing, for example, and the filling out of standard reports took over. Yet these activities are the very antithesis of innovation and creativity, processes that require flexibility, independence, the time and resources to explore numerous possibilities. Creativity can’t be scheduled to take place on a certain day and time, during a meeting, or encased in statistical analyses.

It’s not that businesses don’t require discipline in maintaining costs and excellence in best practices. But that’s not the core of a business. The core of any business, according to those focused on products and the consumer’s experience with those products, is the product itself.

In the Businessweek interview, Jobs said that Apple has processes to keep it efficient, but that has nothing to do with innovation.

He states: “The system is that there is no system. That doesn't mean we don't have process. Apple is a very disciplined company, and we have great processes. But that's not what it's about. Process makes you more efficient. But innovation comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we've been thinking about a problem. It's ad hoc meetings of six people called by someone who thinks he has figured out the coolest new thing ever and who wants to know what other people think of his idea.”

In other words, innovation within companies is as much about having a culture established that allows innovation and creative thought to flourish. Some experts on creativity argue that today’s transition from manufacturing-based economies to knowledge-based economies demands this type of creativity-based environment.

Knowledge Economies Require Creativity

Knowledge-based companies produce, distribute, and use information. Knowledge has now become a commodity, and the ability to produce, store, and distribute this commodity (knowledge) depends on the skills and capabilities of those working in the economy.

John Bardeen on Creativity at Bell Research Laboratories

While working at Bell Labs during the 1940s and 1950s, John Bardeen developed the theory of superconductivity, which led to semiconductors. He describes how the working environment at Bell Labs fostered innovation and creativity:

*Bell Labs had a really outstanding group in solid-state theory. The way the organization was designed, they didn’t have a theoretical group as such but the theorists had their offices in close proximity so that they could talk readily with one another but they’d have to report to different experimental groups. So there was very close interaction between theory and experiment, and most papers were coauthored jointly by theorists and experimentalists. And that was a very exciting time to be there because there was a great enthusiasm for applying quantum theory to make new materials for the telephone system.

The only person to win the Nobel Prize in Physics twice, Bardeen’s theory of superconductivity led to the invention of the transistor, which literally changed the world as we know it. This one invention provided the capability for future inventors to develop computers - and every other electronic gadget we now use daily, from cell phones to IPods.

*Taken from “Creativity, Flow and the Psychology of Discovery and Invention,” by Mihaly Csikszentmihalyi, Harper Perennial Publishers, 1996.

For those who study how to fuel the knowledge economy so that it grows and thrives, such as Harvard University’s Teresa M. Amabile, creative thinking is more important than ever. But the ultimate test in today’s companies is not just letting creativity “survive, but letting it thrive.”

Writing in the Harvard Business Review article “How to Kill Creativity,” Amabile states that managers who keep productivity, efficiency, and control as their ultimate goals end up decimating creativity.

Instead, Amabile states, managers must understand the three essential components of creativity: 1) expertise 2) the ability to think flexibly and imaginatively, and 3) motivation.

What’s in a manager’s greatest control, however, is motivation, according to Amabile, whose research investigates how life inside organizations can influence people and their performance, encompassing individual productivity, team creativity, and organizational innovation.

And to motivate employees, managers have the following tools at their fingertips:

The amount of challenge they give employees;

The degree of freedom they grant around process;

The way they design work groups;

The level of encouragement they give;

The nature of organizational support.

As Amabile and other creativity researchers note, what goes into highly creative and innovative products and successful companies depends on a number of complex factors. However, these researchers do acknowledge, through their research and investigations into successful innovations, that it is possible to effectively nurture and develop creativity.

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